The Secret to Budgeting Successfully
The secret to budgeting is to first determine the programming you have around money. These are the beliefs that determine your actions. Question yourself. What is your program? Easy come easy go, drama queen or king, it’s too hard, it’s a struggle, there’s not enough, only a few can be rich, always broke? You need to have a firm grasp on your programming before any changes can be made or before you begin your budget.
Budgeting is a lot like exercise. You know it is good for you but are not convinced the effort is really worth it. You are sure there are better things you can do to manage your money than living according to a budget. Too restricting! It takes the fun out of living.
Before reading the rest of the article, stop and ask yourself why you don’t budget. This exercise helps. Ask yourself. Why don’t I budget? Listen to the answer. Then ask ‘and’ and wait for the answer. Keep asking ‘and’ until you find the real reason.
Often the bottom line is you don’t want to see in black and white that you are living beyond your means. It was so for me. I felt I ‘sensed’ quite accurately where my money went. I didn’t want to see the true picture. I
knew it wasn’t a good one.
Simply I was in denial about my situation. Coupled with my subconscious belief that money was limited and I didn’t deserve any, my attitude towards financial prosperity was everything will be all right without any effort on my part. Disastrous!
Fortunately for me my partner is a budgeting whiz and it is finally rubbing off on me.
I have learnt that once you decide to budget it is pretty straight forward and surprisingly rewarding.
What is a budget?
It is an estimate of income and expenditure for a set period of time.
Steps to Creating Your Budget
*Determine your income from all sources.
*Determine Your Expenditure – All kinds. The areas of expenditure can be determined by category.
Expenditure Categories
You need to analyse your expenditure to see which ones relate to your situation. You may need to add some.
Housing: mortgage, board or rent
Maintenance: home maintenance includes garden, furniture
Utilities: water, gas, electricity, phone, internet, council rates, body corporate
Insurance: home, contents, vehicle, medical life, income protection
Transport: petrol, licence, car registration, maintenance, repairs, public transport, parking fees
Food: including dining out cost of snacks
Clothing and grooming: clothes purchases, dry cleaning, hair care, make up,toiletries, beauty treatments
Educational or Professional: course fees, educational debt, professional subscriptions, books
Health and Medical: dentist, doctor, optometrist, chemist, chiropractor
Personal: alcohol cigarettes
Entertainment: movies, video, dining out, newspapers, magazines
Hobbies and Sport: purchase of equipment, club membership
Holidays/Travel: air fares accommodation, meals, sight seeing
Gifts Donations/Pocket Money: all gifts given throughout the year, money to spend
Pets: food, vet, registration
Loans: credit cards, store cards, personal loans
Next comes the clincher where you celebrate or commiserate.
Total Your Yearly expenditure. Subtract it from your income. Are you in credit or debit?
Freedom around money comes through managing it.
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